L&T reported 5% higher profits at Rs.3167 crore for the fourth quarter ended March 2018. Total revenues for the quarter were higher by 10% at Rs.40,678 crore. During the fourth quarter, the order inflows were higher by 5% at Rs.49,557 crore with international orders accounting for 18% of these total orders. The consolidated order book of L&T as on March 31st stood well in excess of $40 billion. The infrastructure sector alone accounted for nearly 75% of the order book of L&T. The hydrocarbons segment has seen a 7% pick up in orders as global oil investments are bouncing back.
The saga of banking losses continued with Bank of India reporting a net loss of Rs.3969 crore for the quarter ended March 2018. This was largely fuelled by larger provisions for bad loans during the quarter in line with the new recognition norms. The gross NPAs of the bank stood at 16.58% of advances while the net NPAs were also higher at 8.26%. Like other large PSU banks, BOI is also counting heavily on the write backs it could get on its NPAs due to the NCLT resolution. PSU banks have elicited some buying interest of late due to the hopes that the NPA cycle may have bottomed out!
The memories of the crash in Vakrangee stock had hardly faded when investors almost saw an encore in the case of Manpasand Beverages. The stock tanked by 20% after the auditors, Deloitte Haskins, resigned from the auditorship of the company. Indian auditors had little accountability for a long time but with SEBI tightening the screws on auditor laxity, most auditors have become too cautious. In fact, auditors now prefer to resign rather than restrict themselves to just qualifying the report. Whether the impact on Manpasand is sustained or not; only time will tell.
After touching a high of $80/bbl, the Brent crude fell to a multi-week low of $75.22/bbl. This was facilitated after the US threatened to increase supplies forcing Russia and the OPEC to fall in line and agree to increase supply of oil. In fact, OPEC has recently given a statement that the oil surplus has almost been wiped out indicating that there may now be a pause on the supply cuts of 1.8 million bpd that was announced in January 2017 and has been sustained since. The spread between Brent Crude and WTI crude reached the highest level since January 2015 of $9.38 hinting at further fall in Brent.
The Tamil Nadu has finally ordered the closure of the Vedanta Copper plant in Tuticorin after the law and order situation in the town went from bad to worse. The state has ordered the Pollution Control Board to seal the premises of Vedanta plant in Tuticorin. The copper smelter in Tuticorin had been in the eye of the storm for several years due to its polluting capacity and its pernicious impact on the ground water quality in the area. The locals have been demanding permanent closure of the plant considering that it did not meet the standards of the National Green Tribunal. Vedanta, owned by Anil Agarwal, has called the entire episode a media-driven war, especially considering that the plant was contributing in a big way to the socio economic development of the district as well as the surrounding areas.
It looks like Binani Cements may finally fall into the lap of Ultratech with the lenders of Binani Cements agreeing to the Rs.7950 crore bid put forth by Ultra Tech of the Birla group. This will help Ultratech to further add to its existing capacity of 107 million tonnes of cement per annum. The final bid by Ultratech was nearly Rs.1000 crore higher than the bid put in by Dalmia Bharat. This amount will take care of the Rs.6469 crore that Binani owes to its creditors. With the proposal needing approval of just 75% of lenders, Ultratech already has the approval of 90% of the lenders by value.
